2021 represented the fastest period of home price growth in history. According to the S&P CoreLogic Case-Shiller index, which is the leading measure for real estate prices, U.S. home prices rose 19.1% from October 2020 to October 2021. That increase is down from the 19.8% year-over-year increase from August 2020 to August 2021. Looking at the report further, home prices only increased .8% from September to October. Based on that report, and other market factors, experts believe that the deceleration of home prices is just getting started.

One of the main reasons experts are anticipating a deceleration of home prices is interest rates. Over the past few months of 2021, and through the early first few days of 2022, interest rates have continued to tick up from their record lows. If the Federal Reserve follows through on their multiple expected rate hikes, experts believe this would lock out some buyers from the market altogether. Fewer buyers ultimately would lower demand, causing a deceleration of home price growth. Zillow is still predicting an 11% home price growth in 2022, while Fannie Mae and Freddie Mac analysts are expecting a more conservative increase at 7.9% and 7%, respectively. Overall, early indications point to the home price increase to slow down from its record pace, shifting a bit more in favor of the homebuyer.

Source : https://bit.ly/338HrnA

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